Most employees support the roll-out of pension auto-enrolment, a new survey by the National Employment Savings Trust (NEST) reveals.
Despite experiencing monetary difficulties in the current economic climate, 63% of employees support auto-enrolment, the study has found, chiefly because they had not given sufficient attention to planning for retirement.
The flipside of this employee endorsement, however, is a certain tardiness by employers, many of whom have not given sufficient time to prepare for auto-enrolment. The survey found that fewer than half of employers with 5,000 staff or less have managed to confirm a pension provider yet.
NEST’s chief executive, Tim Jones, said that auto-enrolment amounted to a massive opportunity to increase pension participation; his organisation’s research confirms that most consumers want it, even in the face of squeezed household budgets.
In the past, many people had been put off pension schemes for fear of making a bad choice, he explained; however, he added: “Knowledge that their pension is being taken care of through a low-maintenance approach driven by their employer gives savers peace of mind. Whether the level of contributions will be enough to meet their aspirations is a conversation for further down the line, but automatic enrolment is a great start.”
Much work remains to be done in persuading people to save for retirement, according to pensions expert Tom McPhail of the law firm Hargreaves Lansdown. Default auto-enrolment contributions are insufficient to meet expectations of two-thirds of pre-retirement earnings, he said, and employers still face a big challenge in preparing for implementation.
In 2014, thousands of employers are expected to implement auto-enrolment schemes within a few months of each other.